Worried About Your E-Commerce Business’s Inventory? Here’s What You Can DoPosted by On

Over 70% of online shoppers tend to search for an item somewhere else if it is unavailable on a website. Thereby, running out of a product in a warehouse can turn out to be extremely harmful to the overall sales of a business. This is where inventory management jumps in.

Inventory control involves having an expansive oversight on the business stocks. It helps a company with tasks such as planning and maintaining the business budget. With the increasing scope of online commerce, many issues demand effective tackling. However, that does not make the management of inventories any less important.

The hyper-competitive digital landscape and minimal patience level of customers make it impossible for a business to lag in their supplies. Below, we have listed a few strategies to help you out with your e-commerce business inventory:

Inventory management software

As your online business expands, you will realize that it is getting harder to manage the inventory manually. Following are the few signs that you need sophisticated software:

  • Your current spreadsheet system for the stock count is not accurate
  • Your products are constantly on backorder
  • You have problems to figure out when to order replacement products
  • You cannot predict inventory trends for the upcoming year

Having products positioned for a long time on shelves affects profitability. Similarly, keeping sales tied up in backorders brings a negative impact on retaining customers.

Customers expect to view a product’s status and availability at all stages of the buying funnel. Fortunately, we have numerous inventory management tools available in the market today. You simply have to integrate the software with the e-commerce website. It allows you to monitor the supply chain.

Programs, like Notify Me and Delivered, are effective for handling the complex affairs of inventory control.


This is an important principle when managing inventories. It means that your oldest stock goes out before the new stock. This rule applies, particularly to perishable products.

It is a better approach to sell the old things first as they get obsolete over time and money gets wasted. To make sure that you practice FIFO at its best, you will need an organized warehouse.

If you are working with a warehousing and fulfillment company, make sure that each of your boxes has a logo on it. You can ask the logo design services to produce a design that can be visible on the product boxes.

Manage relationships

Successful inventory management will allow you to adapt quickly. To troubleshoot manufacturing issues, expand storage space or restock a fast selling item with speed – it is integral that you share good relationships with the suppliers. Leather skin shop serves to be a good example of this practice.

Clear and proactive communication helps in such circumstances. Besides this, the product supplier that has been operating with a company for a long time knows about the seasonal demand changes. The relationship from both ends must be strong and vivid. Often, a supplier may be running low on a product, so they notify the business to halt promotions or find a substitute.

Maintain optimum inventory quantity

Whether it is an online business or a traditional brick and mortar store, there is a need for maintaining minimal levels of inventory at all times. When the level goes down below your expected inventory, you should know it is time to manufacture another batch.

Forecast demand

Proper demand forecasting will be the foundation of your inventory management plan. For executing this task, determine the period for which you are predicting the demand. It can be six months or a year.

Next, analyze the sales history of the past year. The sales data for different seasons will allow you to evaluate how much you need to order in each period. This data serves to be the demand basis and starting point for how much you should order. Also, align this with your marketing campaigns.

Determine the minimum stock levels

Stocks should be in fair numbers to satisfy the demand. But not so much that you tie up all your capital in it and the fear of losing it escalates.

Supplement with drop shipping

Running out of stocks is the worst nightmare of a retail business. The solution to this issue is to seek help from drop shippers. They will provide you with the products until you fill inventory gaps at your end. You can also use drop shipping to test the product ideas.

Prioritize with ABC

Some products often demand more attention than others. Using an ABC analysis will help you to prioritize items. You can add products to each of the following three categories:

  • High-value products (with low sales frequency)
  • Moderate value products (with moderate sales frequency)
  • Low-value products (with high sales frequency)

Items in category A ask for full attention as they bring a significant impact on company finances. Products that are in category C ask for less oversight because their financial impact is low and they keep turning over. Items in category B lie somewhere in between the two.

The practices for inventory management depend on the needs of your business. Plenty of problems can surface without the right systems and strategies. Hence, before you establish yourself one E-commerce business, make sure that you have the entire plan sorted out.

Regardless of the business size, you can surely expand the chances of your survival and prosperity by playing all the right cards.


E-Commerce Business

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